The annualised inflation rate, down from 2.2pc in December, came close to the European Central Bank's target of just below 2pc, giving the governing council room to consider a rate cut when it meets next week.

Falling world energy prices and Europeans' reluctance to spend as the eurozone struggles through recession have led to a fall in consumer prices over the past year.

The ECB's governing council meets on March 7 and economists are divided over whether the bank will cut rates to below the current 0.75pc, with some arguing that a European Commission forecast last week that the 17-nation region will remain in recession this year could spur such an action.

"We think recent developments are enough to prompt a policy response," JP Morgan said in a report.

"A cut in the main refinancing rate is not the most powerful measure the ECB could implement, but it is a step in the right direction."

Howard Archer, chief European economist at IHS Global Insight, agreed, saying the central bank "could be forced into reconsidering its position if the eurozone fails to show clear signs of economic improvement over the coming weeks or if the euro strengthens anew to reach new highs."

While inflation pressures seem to have subsided, and the Commission forecast the euro zone's yearly inflation at 1.8pc in 2013, the ECB will be watching carefully. In January, the biggest rises in consumer prices were in food and energy, which together make up a third of Eurostat's index.

Consumer food prices rose 0.5pc month-on-month and energy prices were up 1.3pc in the same period. Offsetting those increases, prices fell in services and factory goods outside the energy sector.